Miles Franklin Q & A: Gold and Silver Are Precious Metals

Q: Does Miles Franklin, or any other firm, randomly, destructively test gold or silver coins, such as American Eagles, to verify the gold or silver content as being 91.67% and 99.9% pure respectively? Not to sound paranoiac, but if the Romans could dilute the silver content of their coinage to less than 1% over 100 or so years, the US government can surely cheat in the same manner in a much shorter time frame. Thank you for all the information that you provide.

David Schectman’s Answer:

I want to address the second half of your question, “if the Romans could dilute the silver content of their coinage to less than 1% over 100 or so years, the US government can surely cheat in the same manner in a much shorter time frame.”

What do you think the government has been doing to our MONEY since 1913? Even by their own standards, the U.S. dollar is worth only a few cents of its value, just 100 years ago.

The mistake you make is equating gold and silver with money. As things stand today, the dollar is money and gold and silver are precious metals or commodities. (That could change in the future) So you see, there is no need to dilute the gold or silver content in one ounce gold and silver coins, since they can achieve the same result without opposition by doing it to our paper currency.

Regarding the first part of your question, “Does Miles Franklin, or any other firm, randomly, destructively test gold or silver coins,” the half a dozen or so primary dealers, who receive gold and silver coins directly from the mint, would never allow a counterfeit or modified product to reach the wholesale market place and the large wholesalers would never allow them to reach the dealers, like Miles Franklin who sell their products. In 24 years of business, we have never seen a counterfeit bullion coin. Gold Eagles have been available since 1986 and so far, there has not been one single instance of the type of issue you are concerned with.

Should the mint try to dilute gold and silver content in their Gold Eagles or Silver Eagles, they couldn’t get away with it. The coins have to be of a standard weight and size and if they change the composition by replacing a small portion of gold or silver with another metal, the color changes. Take a look at a Canadian Maple Leaf, which is 24 carat and compare it to an American Eagle, which is 22 carat. The color is very different. The same is true with a pre-1933 Double Eagle gold coin. The color is different than a current gold coin. You can’t fool Mother Nature!

If the government wants to change the rules of the game, they will confiscate or make it illegal to own gold and silver, but that is not likely to happen. It is not necessary as long as we accept dollars and they can create them, in any amount, at will.

I asked our primary wholesaler to comment on your email. Here is what he sent to me and you will find it interesting.

Hi David,

We have melted Gold Eagles on occasion when they have been very beat up, and we’ve never had any unexpected losses on either weight or purity.

We regularly test private mint coins and bars via XRF Spectrometer for purity and weigh them as well to gauge the quality of these mints. Sometimes they might be off by a few ounces, particularly in silver, on a 10,000 oz lot, and for this reason we’ve had to leave a few private mints behind. However, we have been quite impressed by the quality of Republic Metals and Sunshine’s silver rounds and bars.

With regards to US Minted Silver and Gold eagles:

The US Mint’s silver eagle quality is truly superb. Not only are the coins always testing out at 99.9+% pure silver, but they typically weight 1 or 2 grams more than 31.103! This is part of the reason that paying an extra premium for Government Minted coins is well worth it. (The same goes for Royal Canadian Mint product).

With regards to Gold Eagles: they are consistently within the purity numbers and weight. Additionally, Gold Eagles are about 3% silver, and so you get an average of $0.60 worth of silver in every gold eagle (at $20.00) silver.

I’ve attached some photos of an analysis I just had done. One of these is a 2010 gold eagle, the other a 2014. The purity is right on the money. The weights are over where they should be. (Remember, a Gold Eagle is 92% gold, so you need to take the weight of the eagle times 0.92.)

And one final note is that the Purity and Weight of US bullion coins are set legislatively by Congress. There could be no deviation from this prescription without an act of Congress, and anyone within the government attempting to do this would be prosecuted severely.

I hope that answers your question to your satisfaction.

Q: I am constantly trying to get friends & family members to get out of the stock market and into PMs or at least diversify as much as possible. I send along some of the excellent articles on Miles Franklin like today’s Holter Report (Money As We Know It), but this is the type of response I get:

“If we buy property to protect our money they just will tax it at 90% so we cannot afford to keep it. If we buy precious metals with it they will outlaw that and confiscate and prosecute those who try to use them.”

How do I counter with a logical game plan for people who know it’s gonna get bad but seem paralyzed by inaction?

Bill Holter’s Answer:

“I feel your pain” as even my own sister thinks I fell off the turnip truck! Yes, property can be taxed away and metals can become illegal to own. My written piece today suggests owning a little of the “other white metals” (platinum and palladium) as a hedge. I would look at it this way, if metal becomes illegal and a 90% tax is imposed on the gains, you still have more than you started with versus a nearly zero balance (buying power) on dollar based assets like bank accounts or even paper bills. You can only do what you can do to try to protect yourself, doing nothing and waiting to be slaughtered is not a “plan.” I would also suggest that some metal be held outside of the U.S. and maybe even in the name of a trust as confiscation avoidance.

“If” your friends and family understand that something really bad is coming, this is more than half the battle and I must say “rare” because most people either don’t want to hear it or believe…or just can’t go there. If they understand the world is about to be turned upside down but do not believe in gold and silver, I bet you could convince them to purchase food to eat and the means to protect it. If we break down to barter, bullets will spend quite well in my opinion. Of course silver and gold should spend better but this might just be a bridge too far for some. I wish you good luck in your efforts Michelle, your friends and family are depending on it whether they even know it or not!

Q: It appears to me that silver get whacked pretty consistently every 6pm Globex open. It feels like there is a sell off of about 5 cents on average on 90% of days. I don’t have the detail to do the full analysis but I have a couple of questions. First, if it really is 5 cents 90% of the time the cumulative ytd loss on just that first minute of Globex would be more than $5 ytd. That is HUGE! Why isn’t anyone talking about it? We’ve seen the am/PM gold fix analysis a million times but never a mention of something that seems far more consistent, far more damaging, and far easier to prove. And why hasn’t such an obvious pattern been arbitraged away?

Andy Hoffman’s Answer:

Yep, it gets hit at the 6 PM EST open of the “Globex” ultra-thinly traded paper platform EVERY DAY. Actually, 94% of the time and the only time it opens higher is on days when prices have been smashed in New York trading. And even then, they only are “allowed” to open a few pennies higher. I have written of this blatant suppression many times, and LOL, the “$0.05 rule” in silver is a real thing – as nearly EVERY day it opens $0.05 or so lower at 6 PM EST. And no, it’s not arbitrage able as the markets are too thin and the spreads too wide.

In the big picture, it’s immaterial as prices always move higher as the Asian market opens up. In other words, it’s not so much about price, but momentum as the Cartel does everything they can to sap it before it can get going. This is why they attack PM prices 90% of the time at the “2:15 AM” EST open of the thinly-traded London paper PM market. I don’t have similar stats for the 7:00 AM EST open of New York’s thinly-traded paper pre-market session, but since I typically am at the gym at this time, I can tell you from a decade of experience that gold is hit roughly 90% of the time. Again, the big moves are usually reserved for the COMEX open; and in fact, PMs are only “allowed” to rise materially between the COMEX open and the 10:00 AM EST close of global physical trading; i.e., what I long ago deemed “key attack time #1.” Dmitri Speck has been the authority on this topic, which per the chart below has been ongoing for 15+ years!

Incidentally, the “6:00 PM EST” effect you speak of doesn’t appear here. Why, you ask? Because it is a relatively new phenomenon, by my estimation, of no more than a year or two. Desperate times call for desperate measures, and given how near the Cartel is to its demise they have clearly added this annoying little momentum-killer to their repertoire only recently. Trust me, I know!

Anyhow, to finish the answer, people are asking questions; but for the most part, are being largely ignored. Those that understand what’s at stake – particularly the ingrained “powers that be” – are terrified of PMs breaking out. And as for the rest of society, most don’t understand the ramifications of PM manipulation, and many more are too broke to do anything about it. In other words, a combination of brainwashing, denial and ignorance. But trust us, this will eventually change – likely much sooner than most can imagine – in a BIG way.

Upcoming Events

Meet Miles Franklin investment advisors, attend a Q & A session or join us at an upcoming conference.

There are no upcoming events.

]

Recent Posts

Experience Excellence

For 28 years the staff at Miles Franklin has delivered excellence in many ways – knowledge, relationships, product offers and customer service. They understand the macro/micro economics and geo–political advantages to investing in precious metals to protect your wealth. The team at Miles Franklin build life-long relationships because they custom-tailor solutions for investing in precious metals to meet each individual’s needs and circumstances. Our brokers have or can acquire most any type of precious metal from anywhere in the world. Each and every order is managed and monitored from start to finish. We are licensed, bonded, and carry an A+ BBB rating.